"The suit alleges that Sallie Mae considers the loan default rate of each applicant's school. The higher the default rate, the higher the interest rate charged to students attending that school. According to the lawsuit, institutions that serve large numbers of minority students often have higher default rates than other colleges do."

The plaintiff went to McIntosh College and now works at Rite Aid as a cashier. I think that if you take out a loan to go to McIntosh College, it is likely you will have a hard time paying back that student loan due to the reputation of that school. That has nothing to do with race. I sincerely hope that law firm loses a lot of money trying to get that class action moving.

Or to put it another way, Sallie Mae is doing exactly what lenders usually do: they charge more interest to people who are at higher risk of defaulting. If McIntosh College is the sort of institution that places its graduates into cashier positions at Rite Aid, then I too would be nervous about lending $20,000 to a McIntosh student.

The lawsuit is just about some lawyers trying to cash in. As a mechanism for social change this is completely inefficient. What would happen is:

Effectively you end up with the low risk group subsidizing the high risk group's student loans. Even assuming this is a desirable end goal, it would be vastly more efficient and fair to try to effect this change through the political process.

Class action suits have their place as an enforcement mechanism. They are a good way of, for example, forcing car companies and drug manufacturers to keep standards high. But they are not the appropriate mechanism for changing educational policy.

Effectively you end up with the low risk group subsidizing the high risk group's student loans. Even assuming this is a desirable end goal, it would be vastly more efficient and fair to try to effect this change through the political process.

Another possible outcome of a successful class action is that Sallie Mae stops making loans to students attending McIntosh. Although this is an unlikely result because I fail to see the race bias connection, effectively cutting off financial aid to such schools could be a very positive result by putting schools like McIntosh out of business (assuming such schools truly are bad for society).

If schools like McIntosh are truly bad, then our political system has already failed because the accreditation of such schools should have been yanked a long time ago. So now that you have gotten me to think about this on a deeper level, I might have to flip-flop on my earlier position.

If this class action forced Sallie Mae to charge interest rates to McIntosh students where Sallie Mae couldn't cover its losses (given the high default rate), then yeah, definitely Sallie Mae might just stop making those loans.

Brief internet research indicates that McIntosh is basically a for-profit, overpriced community college. While I'm suspicious of these schools as businesses (kind of like I'm suspicious of expensive T4s), I've no reason to think it gives a poor education and so I'm not sure on what grounds its accreditation could be pulled. I'm also not happy with the idea of the state swarming in and simply dissolving schools because they seem overpriced for their value.

If people want to overspend on an associate's degree then I suppose they should have the right to do so. But similarly Sallie Mae should have the right to refuse to subsidize this sort of wastefulness.

I'd like to know whether this affects low-ranked schools predominantly attended by whites as much as it does those attended by blacks. I think that would go toward helping determine whether this is about race or the employment tracks of the students.

I think the issue is not there is a higher interest rate for colleges with higher default rates...it is a situation where they were informed of lower rates and were then given something else upon acceptance of the loan and determining the interest rate changes seem to hit a higher number of minorities, not just African Americans:

"The suit alleges that Gregoire was told she would receive an interest rate of 7 percent when she agreed to a loan but was later informed of "a six percent supplemental fee at disbursement and an index of 5.5 percent over prime, which now equates to a 13.25 percent interest rate."

Also, this isn't a focus on McIntosh...the other named plaintiff is from another school.

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Susan Cartier Liebel, Esq.Build A Solo Practice, LLCNewly Minted or Well Seasoned, Teaching You How to Create and Grow Your Legal Practicehttp://buildasolopractice.com

That's incorrect. It's funny that you post things on your website but do not know what they are about.

"The suit alleges that Sallie Mae considers the loan default rate of each applicant's school. The higher the default rate, the higher the interest rate charged to students attending that school. According to the lawsuit, institutions that serve large numbers of minority students often have higher default rates than other colleges do . . . . The suit argues that, for purposes of receiving loans, incoming minority students should be judged on their own personal credit history rather than the college's overall loan default rate."

Also, we know the focus is not on McIntosh, we were discussing the deeper social implications of the lawsuit.